1. NCIF 11/17/071 Congestion Management: Leverage & Finance Steve Lockwood PB Consult

2. 2 Expansion of Congestion/Loss of Service Traffic Congestion and Reliability: Trends and Advanced Strategies for Congestion Mitigation FHWA, 2005

3. 3 Causes of Performance Loss: Not Just Capacity Bottlenecks 40% Traffic Incidents 25% Bad Weather 15% Work Zones 10% Poor Signal Timing 5% Special Events 5% Bottlenecks 40% Traffic Incidents 25% Bad Weather 15% Work Zones 10% Poor Signal Timing 5% Special Events 5% Growth in Demand

4. 4 Why Congestion Management is as Important as Capacity (Reliability) 2007 Annual Mobility Report, TAMU

5. 5 Congestion Management Strategies 1. New Capacity (50% of delay today) 2. Systems Operations (Supply Management): re “incidents” (50% of delay) 3. Pricing (Demand Management): (percent of delay depends on extent of applications)

6. 6 Three Strategies for Congestion New Capacity SystemsManagementPricing Facility-by facility Network-wide Facility or Network Long cycle Short-term Medium term Cover some costs (toll) Low cost May cover costs Context-constrained No impacts Policy constrained Low C/E Low C/E High C/E Med C/E

7. 7 SO&M COMPONENT CONGESTION/DELAYSAFETY 1. Ramp Metering -9-11% total delay 2. Dynamic Messaging -0.5% incident delay 3. Variable Speed Limits -5% total delay -5% fatalities 4. Integrated Corridors -10% total delay 5. Incident Management Detection -4.5% incident duration -5% fatalities Surveillance Cameras -4.5% incident duration -5% fatalities On-Call Service Patrols -25-35% incident duration -10% fatalities All Combined Multiplicative reduction -10% fatalities 6. Weather Management -3% total delay (Northern) 7. 511 only -3-5% total delay, rural only 8. VII -12% total delay 2. Systems Operations Does Make a Difference Future options for the National System of Interstate and Defense Highways, NCHRP, 2007

8. 8 Leverage: Long-term Benefits (Interstate example) Delay (billions of hrs) Safety ScenarioCapacityIncidentTotalSavingsFatalsSavings Deployment Trends 9492031,153-5.6%195K-0.7% Aggressive Deployment 685111796-34.8%179K-8.9% Future options for the National System of Interstate and Defense Highways, NCHRP, 2007

9. 9 Progress is Slow: Could Use an Incentive FHWA Deployment Tracking

10. 10 Barriers to Improved Operations Legacy Culture and organizations Legacy Culture and organizations Authorizing Environment Authorizing Environment Fragmented jurisdictions Fragmented jurisdictions Trained Personnel Trained Personnel Dedicated Funding (now 1 % national = $1-2B) Dedicated Funding (now 1 % national = $1-2B)

11. 11 Funding Methods to Encourage Increased Systems Operations Planning Requirements Planning Requirements Performance Reporting (reduced Oversight Performance Reporting (reduced Oversight Technology investment Higher funding match for operations Technology investment Higher funding match for operations Dedicated program funds Dedicated program funds Off- the top funding by performance Off- the top funding by performance Service Target-based funding Service Target-based funding Deliberate Interstate Policy Deliberate Interstate Policy

12. 12 3. Pricing : Tolls Account for 5% of Highway Revenue Other Dedicated Taxes include dedicated sales and property taxes and value capture revenues General Fund Revenues include income taxes, property taxes, general sales taxes, other valorem taxes Last year with data available at all levels of government is 2004. Latest information as of January 2006. (1) Calendar Year (2) Fiscal Year

13. 13 The Changing Landscape of Highway Finance in the US, Benouaich, PB Consult

14. 14 3. Pricing (toll) Projects – How much? Greenfields Opportunities? Greenfields Opportunities? Greenfields feasibility and mixing? Greenfields feasibility and mixing? Non-Greenfields = NHS (where the congestion is) Non-Greenfields = NHS (where the congestion is) Conversion Acceptability (HOT path)? Conversion Acceptability (HOT path)? Constraints where lanes additions involved Constraints where lanes additions involved Where the Action is: The Nation Highway System Network = 162K miles and 45% of VMT (28% is Interstate)

15. 15 Current Status of Toll Project Development Not including TTC

16. 16 Current Status of Toll Project Development

17. 17 The Next Decade: Toll Role? Current toll revenues $7B Current toll revenues $7B Current highway revenues $140B Current highway revenues $140B Trend based total expenditure for new capacity $30-$40 (higher than trend) Trend based total expenditure for new capacity $30-$40 (higher than trend) Trend-based toll expenditures for new capacity $8-$10B (exclusive of concession payments) Trend-based toll expenditures for new capacity $8-$10B (exclusive of concession payments) Large Growth states 50%-plus Large Growth states 50%-plus Trend-based toll revenues based on Trend 15-17B (exclusive of concession payments) Trend-based toll revenues based on Trend 15-17B (exclusive of concession payments) Trend-based total revenues $165-$170B Trend-based total revenues $165-$170B

18. 18 Barriers to Toll/Pricing Development Resistance to Conversion Resistance to Conversion Need for network level development Need for network level development Concern for network effects (diversion) Concern for network effects (diversion) Consideration of Equity (dual system?) Consideration of Equity (dual system?) Stakeholder/User control (state, local) Stakeholder/User control (state, local) Politics of excess funds investment Politics of excess funds investment Credibility of owner/manager with major funds Credibility of owner/manager with major funds

19. 19 Methods to Encourage Greater Use of Pricing for Congestion Management Congestion management targets (to foster pricing) Congestion management targets (to foster pricing) Interstate Conversion Forgiveness Interstate Conversion Forgiveness Service Target funding with incentive to meet Service Target funding with incentive to meet Credit enhancement, etc. Credit enhancement, etc. Aggressive match bait Aggressive match bait Deliberate Interstate Policy Deliberate Interstate Policy

20. 20 Vision: Vehicle-Infrastructure Integration Mixes VMT pricing and Advanced Operations

21. 21 Characteristic 20 th Century 21 st Century Org. Model Gov’t. Department Authority (enterprise) Management style Bureaucratic, stable Entrepreneurial Mission Develop system Meet service expectations Resources Tax politics User fees/capital market Consumer signals Indirect only Organized customers/prices Focus System Development Systems Operations Serviceshed Political jurisdiction Consumer orbit/market Partners Legislative authority Users, Markets Perf. Criteria On budget/schedule Customer satisfaction TechnologyProcurement-driven Best available Needed: New Institutional Evolution